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We all know that annuity sales have been in decline for some time with the rise in popularity of drawdown under the Pension Freedoms and the poor value they are perceived to offer.

The FCA recently issued its long-awaited policy statement on disclosing costs and charges to workplace pension scheme members – PS20/2. I wrote about this back in June last year, shortly after the consultation had closed and it had all been very quiet for a long time.

Platform and SIPP operators AJ Bell and Transact have reported strong trading in the most recent quarter. Both recently floated on the stock exchange.

SIPP and platform provider AJ Bell has launched its Retirement Investment Account (RIA) today - a new low-cost pension with a ‘streamlined’ investment proposition.

As you will no doubt be aware, we have recently had the budget date announced as 11 March. This is somewhat later than anticipated, not least because the Conservatives pledged a post Brexit Budget in February as part of their election campaign.

Forgetting the taper may be wishful thinking for those of us in the pensions world but most of the general public (NHS aside) may be blissfully unaware. 

Platform and SIPP provider AJ Bell saw pre-tax profit rise by 33% to £37.7m in the year ended in September, the company reported today.

Starting a pension for a child is a very long-term investment, and probably one only considered by high net worth individuals who have used every available tax wrapper to the max. Given the most that can be paid in for someone with no earnings is £3,600 gross a year, it’s important that any pension started is low-cost or the tax benefits can quickly be wiped out.
With political parties due to unveil their election manifestos ahead of the 12 December General Election AJ Bell has launched its own election wish list.

The firm has set out a series of proposals designed it says would “radically simplify” the rules savers are required to navigate.

AJ Bell’s ‘manifesto’ includes:


·        ISAs, which have become popular with investors partly because of their simplicity, are under threat from the same creeping complexity that has suffocated pensions

·        We now have at least six different types of ISA, each with different rules and restrictions people need to understand

·        The next Government should return the ISA to its simpler roots by creating One ISA incorporating the main features of the existing framework

·        This would include a 25% bonus on the first £4,000 of savings where the money is used to pay towards a first home, payable on completion


·        The next Government, whoever it may be, needs to address mounting complexity which risks putting an entire generation off saving for their future

·        In the short-term the annual allowance taper needs to be scrapped to ease strains on the NHS

·        This should trigger a longer-term, independent review of pension tax rules aimed at simplifying the system and encouraging more people to save for retirement

·        The unfair and poorly understood money purchase annual allowance (MPAA) should also be ditched as part of this review. If necessary, the annual allowance could be lowered to compensate for any lost revenue to the Treasury

·        In addition, policymakers should aim to simplify the overall tax structure by moving to a single annual allowance for defined contribution (DC) pensions and a lifetime allowance for defined benefit (DB) pensions

·        Pension death benefits should be formally excluded from the Inheritance Tax net to remove the situation where pension providers, not the customer have discretion over who receives pension funds when someone dies

Andy Bell, chief executive of AJ Bell, said: “All too often election manifestos focus on short term political point scoring, while the savings gap in the UK continues to widen.

“This is one of the biggest challenges our society faces and the next Government will have a huge opportunity to make life a lot simpler for people trying to do the right thing and save for their future.

“Pension reforms in 2006 were supposed to usher a new era of simplification for pensions, but since then politicians have repeatedly tinkered with the rules to the point even an actuary would struggle to make sense of some of them.

“No sensible person would create a pension system from scratch with three different annual allowances, a lifetime allowance and no fewer than seven lifetime allowance ‘protections’.

“Now automatic enrolment has been fully introduced, focus needs to turn to engaging more people to save for their own futures.

“Creating a more straightforward tax system which people understand is a necessary condition for building greater levels of trust in pensions.

“ISAs have similarly morphed from simple beginnings to become increasingly difficult for investors to understand.

“Incorporating the best features of the current ISA system in One ISA, including the bonus for first home purchase, while removing the unnecessary complexity we know puts people off would make life easier for millions of people.

“Furthermore, new investors could be better encouraged to save for their future in a system they can more easily understand.”

Two rival platform 'engine' providers - who run many UK platforms including AJ Bell - have joined forces following a takeover deal.

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